Correlation Between Bread Financial and Credit Acceptance
Can any of the company-specific risk be diversified away by investing in both Bread Financial and Credit Acceptance at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bread Financial and Credit Acceptance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bread Financial Holdings and Credit Acceptance, you can compare the effects of market volatilities on Bread Financial and Credit Acceptance and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bread Financial with a short position of Credit Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bread Financial and Credit Acceptance.
Diversification Opportunities for Bread Financial and Credit Acceptance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bread and Credit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bread Financial Holdings and Credit Acceptance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Acceptance and Bread Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bread Financial Holdings are associated (or correlated) with Credit Acceptance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Acceptance has no effect on the direction of Bread Financial i.e., Bread Financial and Credit Acceptance go up and down completely randomly.
Pair Corralation between Bread Financial and Credit Acceptance
If you would invest 7,179 in Bread Financial Holdings on August 24, 2024 and sell it today you would earn a total of 1,117 from holding Bread Financial Holdings or generate 15.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Bread Financial Holdings vs. Credit Acceptance
Performance |
Timeline |
Bread Financial Holdings |
Credit Acceptance |
Bread Financial and Credit Acceptance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bread Financial and Credit Acceptance
The main advantage of trading using opposite Bread Financial and Credit Acceptance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bread Financial position performs unexpectedly, Credit Acceptance can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Credit Acceptance will offset losses from the drop in Credit Acceptance's long position.Bread Financial vs. Capital One Financial | Bread Financial vs. Fras le SA | Bread Financial vs. Clave Indices De | Bread Financial vs. BTG Pactual Logstica |
Credit Acceptance vs. Capital One Financial | Credit Acceptance vs. Bread Financial Holdings | Credit Acceptance vs. Fras le SA | Credit Acceptance vs. Clave Indices De |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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